Just to let you know, I dont know if you already read this but its confirming that the PSP will play PS1 games, Not pointless pictures or peoples lies about it!!
Heres the convo: GS: Now, in regards to the PlayStation One games that PSP owners can download, will we see that this year?
KH: The plan is to bring that this year, as close to launch as possible, as we start embarking on our online initiative. Again, the sooner we can bring that, those titles out to the market, the better. Obviously, we certainly are not going to have 1,200 titles come out at once.
GS: Of course.
KH: You also need to realize that some of the games just don't translate well onto a PSP environment, games that require the use of the two analog sticks, for example. That requires some thinking as to how you want to do that in a PSP environment. So there are some limitations from that perspective as well. But the plan is really to have something day one, or as close to day one as we can.
Source:
http://www.gamespot.com/news/6156046.html